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Google Ad Revenue Up 79% in First Quarter

Web Giant Spent $50 Million on Its Own Marketing

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NEW YORK (AdAge.com) -- The great marketer lurch toward the Internet was further underscored today with Google's latest earnings report, which showed just how much the company is benefiting as more advertising budgets migrate online.
Google's total advertising revenue in 2005 was $6 billion. Above is a walkway at the Internet giant's headquarters in Mountain View, Calif. (Photo: AP)
Google's total advertising revenue in 2005 was $6 billion. Above is a walkway at the Internet giant's headquarters in Mountain View, Calif. (Photo: AP)


Profit jumps 60%
The Mountain View, Calif., Web giant exceeded analysts' expectations, reporting a 60% jump in first-quarter profit. The world's most popular search engine reported net income of $592 million for the period.

Google saw a sizeable increase in advertising revenues for the quarter ended March 31. Total advertising revenue was $2.2 billion, up 79% year-on-year and up 17% from the previous quarter. Total advertising revenue in 2005 were $6 billion, up from $3 billion the year before.

The global company, which derives most of its ad revenue from paid search, is also pioneering new advertising platforms by developing ways to apply its own auction-based system for selling ads in other media. Google has been mostly relegated to reselling remnant space in traditional media outlets such as radio and print, but the company wants to expand and is considering how it could apply its ad-trading mechanism to the TV arena.

Google also said it spent $50 million on advertising and promotions in the quarter. Google has been a sponsor of PBS' science series Nova.

Yahoo also thriving
Google's stock rose 1%, or $4.50, in after-hours trading. Google's biggest rival, the No. 2 Web firm Yahoo, also reported a giant increase in advertising revenue April 18. The company reported marketing services revenue of $1.3 billion, up 35% on the previous period.

A Merrill Lynch report released last week predicted that the Internet would be collecting more advertising revenue than the magazine industry by the end of 2006. The investment bank is predicting a 27% surge in online ad revenue for the year.
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